Episode 134 - Dump on Dave: Criterion's Critical Analysis of Dave Ramsey's 7 Financial Baby Steps

All right. What is up and welcome back to the best. What is Up commercial real estate podcast in Jinx Oklahoma. It's the biggest and best man. I heard it was second best. It was the only one, the only one. So what updates do we got right before we get started on today's show? Uh We just spent two days in a sprinter van. That was fun. I'm sure we'll have a cool video releasing on that soon. Gonna gonna try to spice up the, the content a little bit, trying, trying something new. We got a new camera that could be fun. Could suck. Tell them why. We spent two days in a, a sprinter van. Sprinter going all over Texas. Oh, yeah, it's way more interesting. So, um a big package of convenience stores that, that we're looking at acquiring um largest acquisition to date uh could be, if we take it down, it's gonna be in contract. Uh By the time this releases, we're negotiating the PS A now, super exciting stuff. But anyway, we, we flew into DFW after a long arduous four hours on the tarmac stuck in a plane hostage against our will but we finally took off and then, uh, yeah, two days in a sprinter van touring around DFW and, and kind of all the way almost to Houston.

Um, Tyler Naga doche. All these weird. Yeah, I don't even know all the cities. But, hey, so once we launch this project, if we end up, uh, purchasing it, uh, it's basically a large sale lease bag from a huge, uh, c store operator in Texas. And I don't know that we've covered uh sale lease bags uh extensively and we probably should get someone like from Stan Johnson company that's now North Mark to come on and talk about it, but that's an area of real estate. You should, you should get to know usually involving uh single tenant, net lease buildings. So anyway, that'll be a good topic for a future show. Yeah, that'll be sick. We're super excited about it. It'll be in contract for a while. Um, probably start releasing information, you know, next month, February about it. I know we're putting the marketing package together now. Um, we'll be doing a big equity raise on it. I think it's a 47 million, 47 million dollar takedown. Finally, an equity raise that everybody can get all the money that they want in. If we, if we get it all, another note I've got for you guys. Uh, we have the coldest weather of the year coming into Tulsa, like much of the country.

Uh, we're dropping tonight, uh, down in, you know, near 20 but by Sunday, Monday, Tuesday and Wednesday we will be around, uh, with lows of either negative zero or zero. I'm getting uncomfortable and so my pool is already at a temperature, the lowest temperature of the year. But, uh, come Tuesday, Wednesday, I think it'll be as cold as it's ever been. Uh, they're gonna be ice chunks in my pool. Brian's two and the temperature is probably gonna be pushing down almost to 0 3334 degrees and I've never cold plunged at 3334 degrees. So we will be filming uh another podcast, water freezes at 32. What are, what are we doing? And your body's gonna freeze in 3435 degree. Uh So, hey, so tune in to, to catch that video. But what we thought would be cool uh is if anybody wanted to uh film their own cold punch during those couple of days and send their videos to us so we can make uh a little collage of all the podcasters that are the side to try the cold plunge. I know there's a few uh Not many, I don't know who's gonna send in their videos.

Uh But if you, if you have an idea to do a cold plunge, you have access to a pool or a tub and you want to take a video of it, send it to us. Uh We'd love to see, uh, who all has decided to try this and how awesome to do it, uh, on the coldest day of the year. Let's make it interesting. Let's put some money on it. If you send us a video of you doing a cold plunge and freezing cold water, freezing cold water, we'll send you 100 bucks. Ok. Does it have to be outdoor? Does it have to be an outdoor pool? It, it's gotta be a cold plunge, right? So like it could be a horse trough with freezing cold water in it but like you need to look cold I know if it's gonna be fake. Ok? And I'm gonna, I'm gonna put it out. You can't jump in and jump out guys give me three minutes for your $100 three minutes, I'll maybe do a minute but I'm not taking $100. I mean if you made it like 2, 2.5 minutes, we might still send you the money anyway. It's going to be a ton of fun. Um that's Tuesday. This is gonna release Monday. So you have a day to do your do it Tuesday or we may do it Wednesday of next week. If it's up to me it's gonna be tomorrow every time. Let's try it tomorrow. Alright. So uh the topic for today, one more massive massive crypto news, right?

All of the the Bitcoin ETF s got to prove there's like 11 I think that are trading as of today recording, which is the 11th of January. So that's, that's exciting stuff. There wasn't a big bump in Bitcoin price, was there? Not huge. But I would say that some of the alt coins that I own were up 10% yesterday. So it was a, it was a, it was a big day overall for crypto. Yeah, it seems like the big guys just trying to capture the fees. I mean, there's no doubt they've had massive withdrawals because they can't control the, the crypto space and like they're just trying to keep the money in house from my perspective. Um But anyway, having is coming up in April, if you know anything about Bitcoin or, you know, you don't live under a rock, you know about that. That could be huge. That could be another massive run another, another thing that's just gonna make this year that much more entertaining and we're not giving you financial advice. No, of course not. No. That would be a horrible idea. Why would you buy Bitcoin anyway, topic for today's show. So today, uh we thought we would take a dump on Dave, dump on Dave Dave. And for those of you who don't know who we're talking about, it's the financial guru, very successful teacher of finance Dave Ramsey.

I didn't, actually, I didn't know him before we decided to do this podcast. I gotta be honest. I've never heard of that. I don't know he's never heard of me. You know, where you've been living. But Dave, uh, he has 17, I think I read this, if it's accurate, 17 million weekly listeners, which is massive. Have you ever watched the show too? I have watched and listened, I watched some podcasts of his for the first time last night. Uh, you know, big and Christian circles guys huge. You probably have a class at your church. They're teaching you to be money wise using Dave's formula. Uh But we think, uh it's not conducive to getting rich or to achieving your financial goals. Uh But there are some good things about what he teaches. So we're gonna go over his seven baby steps, really his six baby steps. But he didn't want to have the number six. He likes seven. He's Christian, I think, I think, I mean, the name summarizes it almost right there. There's seven steps for financial advice for babies. I agree. And we don't, we don't mean that condescending. It just means, uh, we think Dave's, uh uh in comparison to people that are gonna show you how to be financially sophisticated and how to be rich and how to retire young and how to have your, your financial freedom.

Uh We think Dave in that respect is more like a preschool teacher with his seven baby steps and that there's so much more to learn in order to really achieve your goals and dreams. Uh So, but without further ado, let's, let's get into his seven steps and then we'll have some commentary. Uh you know, but I wanna say one of my favorite sayings right now is that thinking is the most difficult of all activities and that is why so few engage in it and everybody is looking for the quick fix, the easy checklist. Hey, I don't like to think about money. It's, I don't wanna think about my future. If you'll just tell me what to do, I'll just do those things and then I'll not have to think about it anymore. That's most people that follow Dave. Uh they just want to be told that they're good that they're checking the right boxes that they're getting themselves out of debt and then they switch their brain off and they work their 9 to 5 until they're 70 they hope that they have enough money to retire and we think there's a way better way to go about doing that. So yeah, I mean start with not turning your brain off and hoping. I mean I'd start with start with probably that's that's a good start.

Alright, so let's get into his steps and then we'll we'll have some commentary. So Dave's number one step is to save $1000 in an emergency fund. I agree with this step kind of a starter emergency fund because then he goes in to step number 336 months, but like an emergency. Right like my HV AC units going out, my fridge is going out again. Maybe 1985 $1000 would be fine for an emergency fund. But like a set of tires is more than 1000 dollars. Actually, I would say when Dave came up with this first baby step 3020 years ago, 30 years ago, 1000 was worth uh you know, more, I guess probably $2500 savings today if you, if you did the inflation calculation. But what he's saying there is if you, if you're living a paycheck to paycheck without money in the bank, you are at risk for financial ruin and you need to stop and get money in a bank account immediately. So I agree with step number one, whether it's 1000 or 2000 is you can't be living with no money in the bank. And if you have, you blow a time or you lose an HV AC and you gotta go borrow that on a credit card just to survive.

Terrible strategy. So that's good. Number two, gosh, step 1.5 make sure to have a source of revenue to save your $1000. So his second step is pay off all of your debt except your house. Uh I'm ok with this step for most people, especially when they're first starting out. Uh You know, if they don't have a lot of investments and they're at risk financially getting rid of high interest credit card debt is a good way to go about it. In fact, you should never be carrying consumer credit card debt at 18% or whatever it is. Anyway. Again, glaringly obvious statement. Right. Like the, the APR on, on credit cards is like tw 23%. I mean, you can't be borrowing money on credit cards and, and think that's a sustainable future. I, I almost think more of what he's talking about here is like a car loan. Right? Well, he says time to pay off the cars, the credit cards and the student loans. Ok. Ok. Well, you don't even need to pay off student loans now. I mean, you get forgiveness but even if you didn't get forgiven, aren't you student loans usually pretty low? 3 4%. And so, uh, I, I would say that that should not be a step.

Uh, you shouldn't be your second step anyway. Uh, it shouldn't be pay off a student loan that you don't have to pay back for years at 3%. That would not be included in this step. So I disagree with that part but I'm ok with, with car loans getting paid off or on a short amortization and it's tricks people into driving a car that they think they can afford when they can't. And so paying off car loans, paying off consumer debt, you should never have credit card debt anyway. So, yeah, number two for the most part. I'm ok with. All right. Number three, uh, he, he says save, uh, 3 to 6 months of expenses in a, in a fully funded emergency fund. What do you guys think about that? Actually, I don't know what you guys think, but I'm, I'm ok with it because, uh, you know what, if you lose your job or something like that, it takes you a bit to, to get, to get a new job. I mean, on just going back to like, I know we're calling them baby steps. But I, I think that's one, right, like I think that's number one. Like we know we shouldn't have credit card debt. We know we shouldn't have super car payments. We know we should have at least access to $1000. Holy hell. Right. Like saving 3 to 6 months of expenses?

I, I feel like that's, that's a solid start. That's a, that's a realistic expectation of a good emergency fund. You can lose a job, you can get a new job. I pay your mortgage. I wonder what, you know, a lot of you guys, hopefully, um you're not living paycheck to paycheck. Um, but do, do you guys go through the mental exercise I did when I was working is what if I get laid off? What if this company closes? Uh Am I, am I ready for that? How long would it take me to get a new job? How much money would I need to survive to, for, for six months a year while I'm looking for that next job. If you haven't asked yourself that, that question, then you're not in a stable financial situation, you need to be planning for things like that. What if my income stops tomorrow? So I'm still with Dave. I agree. It's a very, very baby step. This would be something I teach my middle school and high school, uh, kids. Uh, these are the steps I would tell them, don't use credit cards, you know, always have enough cash for, you know, six months expenses. And so if you don't have that, then don't, don't spend any money until you do have it. I mean, it's January. So we just got past Christmas but my, my oldest son is nine and he's 40%. He's 40% there to step one and he's nine, he's got 400 bucks.

Like the Barrett entry is, if you have $1000 iphone and you don't have, uh, 3 to 6 months in the bank, then you are not financially sophisticated and you are at risk. Well, that's why we had to have step number two. So you can pay off your finance iphone. People don't even own their damn phone. You should have $100 phone, uh, until you have 3 to 6 months and then you could even consider buying a $1000 iphone. So, ok, so we kind of agree with everything. Uh, kind of so far. Step four, I think is going to be interesting. Yeah. Step four. We're gonna start diverging. Step four. Is he wants you to invest 15% of your household income in a retirement account. Like a, what do you guys think? Well, an Ira or a 401k or something, I think is what he means. I mean, I, I, so I like the idea of a, of a, a tax sheltered retirement account. I don't hate that. I, I think if you've got a good 401k match, taking advantage of the max, you know, putting five grand in a Roth ira, if you can, again, don't necessarily hate that if, if you start getting into, like, you know, what's going on in that retirement account, I could probably start to hate a lot of it.

So, when I was doing this because you guys know I did this for 40 years, uh, anything I could get matched dollar for dollar or even 50 cents on the dollar I was gonna do because that I'm not. And if you're in any reasonable tax bracket, when you put it in, you get a 30% bonus because you're not paying taxes, it goes in tax free, you get a free match grows tax free. So, guys, uh, once again, these are baby steps. I agree with Dave on this one and here's why, uh, if you don't have any money and the first thing you should do, you the first thing you shouldn't do is go put that in a risky real estate deal. Ok. So I like the idea of, of putting money in a retirement account that creditors cannot access. Uh, and that you get, uh, you know, free tax, uh, tax deduction on the way in and maybe matching from your employer. And he's not saying 30% of your income 15% that way. If any venture you do right in your twenties or thirties doesn't go well. Right. II, I had some things not go. Well, at least you're taking care of your future self.

Uh, everyone should have money in a retirement account that's gonna be safe from creditors that is gonna grow over time. And I'm ok with that 15% being, uh, in the market and I would do an S and P index fund. Ok? But here he, he says a statement under there that I'm not necessarily agreeing with. He says, because if you're still working at 67 it should be because you want to. Not because you have to. Well, if all you're doing is investing in a 401k your entire, I don't think at 67 you're gonna have very much money to retire. Well, he's no, he's saying you want to retire before 67. I'm not sure you can retire before 67 and have a whole lot of money for the rest of your life. And if, if everything's paid off and social security still exists and inflation doesn't exist. Ok. But he's saying you can retire before 6765. You know, once again I'm ok with, with this, whether you can retire with money or not at 65 all depends on your income. Right? Because 15% of 25,000 a year probably doesn't get you there. But if you're making 100 and 50,000 a year, then it is, it is gonna get you there. Yes. What's average household income in the United States these days? Uh, maybe, well, average household income in the United States, I'm really interested and median household income, they're two different things, the average household income will take into account people that make, you know, a quadrillion million dollars a year.

And so it raises it, the median is half below and half above 74. So, yeah, so we're talking about 7500 bucks, potentially $10,000 that you need to invest a year. I in a tax sheltered retirement account. Right. I agree with that. I'm ok with that. I agree with that because once again, uh, I thought we were supposed to be disagreeing with this. Well, after taxes 75,000, it's only, you know, 45,000 or something. Right. So, I mean, 7 to 10 becomes a lot harder at 40. I mean, if you're bringing home 45 and you're trying to invest, I don't mind agreeing with Dave on some things. So it's only a partial dump on Dave. Uh, save, uh, number five is save for your children's college fund. This gets a lot of publicity and a lot of likes and I don't really love it. Um, I'm not against it. Ok, because I, how I understand these accounts is they, you can invest, uh, money tax free or does it just grow, tax? It just, it just grows tax-free, I'm pretty sure.

And so, you know, the, the, once you get all your base covered, um, the putting more money in a mutual fund is not a great investment, you're gonna average 8 to 10%. And then this money ha in order to get the, the tax free growth, you've got to actually spend it on higher education. And so what if your kids don't go to college? What if it doesn't cost as much as you thought it was going to, it grew too much now you're gonna have this tax liability. Like I'm not, I'm just not sold that. It's necessary you can invest money in an ira in the market and not have any restrictions on the money and it's gonna grow at the same rate. You just don't get a slight tax benefit. And in any event, over the 15% we're gonna want you to invest in higher return like real estate and real estate provides both double or triple the return as this account will. And it still gives tax advantages. So, overfunding a 529 plan, I don't think it's a good plan if you want to put a few dollars in there, just, just for, you know, to have some money for college. Fine. Uh, but what do you guys think? Well, I think if you were to put money into a college fund when your kid's five years old and you hang on to it for, you know, what, 15 years, 14 years that if you put it in real estate, the compounding is going way out, way out than putting in a mutual fund or something like that.

And there's no restrictions, you put that money, you can spend it on so you can spend it on your kids' college or you can spend it on vacation or you can invest it in other, other stuff. I've kinda got a couple of different opinions on this one. I, I think it's, it's gotta be thought of super early. Right? Because you've got to take advantage of the, the cumulative compound and growth of starting early. So if you're just now having a child and you're super young and your Children are super young, the idea of putting $50 in a month or, or hiring them from your company, so you can write off the expense, they can make money, they can invest that money and then save up for college or, or they don't go to college, they can use it to start a business or buy their first home or something. That, that makes sense. But I think if you're, if it's getting to the point where, you know, your kids 1012, 15, right. And you're having to save $1000 a month, 15 $100 a month that you don't have, that's severely hurting your quality of life. And specifically for a college education plan, I think it's too late. I, I think you really need to start looking at your quality of life and, and the compounding interest of putting that money somewhere else to put for use for your retirement.

Right? Because they're, if they want to go to college bad enough, they can work their ass off. Right. They can, they can throw a ball really well where they can go get student loans like everyone else and it works real quick if you fund a 529 and then what if your kid doesn't go to college? Which is happening a lot right now, then you pay, I think it's a 10% penalty to pull it back out. The thing about this guys, if you start saving in a regular investment account with, with higher returns than this account, and then you get all the way to the point where your kid goes to college and, and uh your kid can get loans at 3% or 4%. Well, then having that money stay invested that's grown all these 15 years, stay invested. At 10% while he goes and borrows his, his, uh, student loans at three or 4%. And you don't have to use the money to pay for that. You're gonna, I mean, it doesn't take too much sophistication to understand you're gonna be way ahead. Right. You're taking advantage of the system. But if in the college 529 plan, you can't get to that money unless you use it for the college. So I just don't like the non flexibility of the option here and have your kid open up your mail at your office and write that crap off. You know what I mean?

I mean we've all seen the video of you know your kid's gonna be a millionaire by the time they graduate high school and it's gonna cost you $2 a month like just go on tiktok and type that in you'll find it. Alright. Number six. So number five we don't love number six pay off your home early for most people. This is just plain bad advice I think he says this right now unless you have an 8% mortgage I mean most people have a mortgage in 3 to 4% range right now. Why would you want, why would you wanna pay that off when you can take that money and go make you know, 20% plus you get to write off the interest that you pay so you get it's a double it's a double benefit. Not only if you did a tax adjusted return, it would be if you, not only you returning your returns, if you're getting a 3% loan, I can go make 15%. I'm making five times the compounding return and we're gonna do another show on why the size of your return matters. Ok? Because over time, the rate of your return makes all the difference. So paying something off at three or 4% is just, just terrible decision. But you could argue. Well, Joel, you're, you're, you're in a less risky position, your house is paid off freaking homestead exemption, dude.

Well, what risk? Well, ok, just that if you lose your job, they can come take your home or something. But, but yeah, if you have a homestead exemption, nobody's taking your freaking house. No, they can. If you don't make your mortgage payment, right? That's only from creditors, they can foreclose your home. If you don't pay the actual mortgage payment, you can be at less risk position. But if you're, if you're making good financial decisions and you didn't overpay for your house, you didn't over leverage your house. And so there's nothing to really worry about there. Uh And even then if you're keeping enough cash on hand, like the other steps, say to, then if you lose your job, you're not gonna have to move out of your house immediately anyway. And so I just, I think if you do the math on, let's say the average house is $250,000 and you invested that over 20 years or 30 years at, at 12% versus what you'll save on your mortgage uh of, you know, three or 4% you're talking about probably millions of dollars. So his, his number six baby step is costing you thousands if not millions of dollars in returns and, and it really doesn't provide that much benefit besides that, you feel better about yourself.

Yeah, my favorite thing about investing in commercial real estate is positive leverage, right? We find money machines that make eight or 9% unleveraged. We go and borrow the majority of the money we need to buy the money machine that makes eight or 9%. We go borrow that at 4% or 5% or right now, 6.5, 7, whatever it is. But the money machine makes more than the cost to borrow it. That is called positive leverage. So paying off something that you, that you borrowed at 3% is saying I can't do anything else with this money that makes more than 3%. So you take it back outside of, outside of risk. That's exactly what that means and you lose the tax benefit because you can write off interest up to a $750,000 mortgage or, or something. Now, uh I I will see the comments, you know that if you borrow money in commercial real estate, it's risky. It is, it is riskier, right? We, we take on more risk by leveraging and that way we double and triple the returns, but it is, it does have inherently more risk.

So we have to make sure we're really good at what we do. It takes financial sophistication to do that. And so going back to Dave's a preschool teacher is that he really just allows people to not be sophisticated and to eliminate all risk at the expense of millions of dollars to, to their future self all. And then in the attempt to be as safe and secure as possible, put the pacifier in and, and you never think about it again. And so, but ok, that's not what we're teaching here, right? We want you to achieve your financial dreams. We want you to uh take back your free, your time freedom. And we believe that with a little bit of effort, you can get an outsized return and just an amazing return, like just what we're offering our limited partners and again, our limited partners, most of them turn their brain off, right? Like give us money, turn their brain off. That's why they gave it to us to put in the It's real estate deal and they're, they're earning double, triple, sometimes quadruple guys over the S and P 500 historically on average or the market historically on average. So when you settle for that. Like you said, you're robbing your future self and it's, it's for convenience, it's for comfort.

It's to make yourself not think. Right. So, just a little bit of effort. A little bit of knowledge, a little bit of Googling. Right. And, and, and it's, it's easier to have the money and I wanna, I've said it before but Dave's plan is for people that, that love their job, that want to do it for their entire life that always want to be thinking about money, uh, that, uh, want to retire at 65 with a, with enough to live on. But I want to ask you if you're listening, why are you thinking about retiring at 65? Just ask yourself, right? Who decided that you were gonna retire at 65? That's when my buddy stops working the government? Ok. Did, but, but I'm saying, asking yourself tough questions like, what if you ask yourself, uh, how I could retire earlier than 65? You know, why ask yourself, how do I save enough money every, every month in order to have a million dollars when I retire? Why would you ask yourself that? Right. Why wouldn't you ask yourself a better question? Like, you know, how do I, uh, make a million dollars a year or how do I, uh, you know, make $200,000 passively in income by the time I'm 50 or how do I quit my job by the time I'm 50.

You know, those are, if you ask those questions, now, you gotta think really hard on how to solve those questions or solve those problems and, and that takes a lot of work and you always are thinking, OK, am I doing enough? So you have that burden uh but, but the burden will help produce results. But if you don't ask yourself that question, then you're just at the mercy of your employer and you have a hope strategy you have like you said, turn your brain off and hope I'm just gonna say this 15% of my income like Dave says, and I got my 3 to 6 months emergency fund and I got my house paid off and I hope when I'm 65 that I have the money I wanna have but why wait till you're 65 to have the money you wanna have, why not, why not set up a plan that gets you there quicker? And that's what we're pitching here. Um Alright, the the last step for Dave is uh is not even a step. I love how we're just to Dave. The last step is build wealth. He says, Brian, what does it say under there on? Does Dave give some real good advice on how to build wealth? Well, he says, you know what people with no debt can do anything they want. The last step is the most fun. Think about that guys.

Uh My my son doesn't have, uh, any debt. Can he do anything he wants? Right. Does not having debt. Give you the ability to do anything you want. You have no money. Yeah. You have to have income and money to do anything you want. You need a lot of money to do anything you want because people have big dreams and they have big goals. And so if you want a million dollar house, if you want a vacation in, in Bora Bora, and if you want to go see the Vatican in, in uh in Italy, like that takes a lot of money. It has no, it has nothing to do with the amount of debt you have. Now the debt can get you on your way to, to saving more money. But he doesn't give any advice really on how to generate wealth or how to quit your job. Uh and, and I think we're trying to pitch that. He wants everybody to get themselves safe and then he gives zero advice. He leaves them in preschool, the preschool teacher leaves them in preschool and he never uh helps them graduate financial college and really become financially sophisticated and earn higher returns and use uh positive leverage and generate wealth and, and passive income. So I think anybody that gets to this step and they're 65 years old and ok, they follow all these steps and they have a million dollars in retirement fund thinks they can do anything they want, I think they think.

Oh, I'm gonna, I might live another 25 years and a million dollars isn't gonna go that far. I need to keep saving money when I talk to and again, when I talk to people that are 67 and, and maybe just retired, I don't think they're doing anything they want. It looks like they're not doing anything at all. Right. Like they're, they're out of shape, they can't move, they're not going on a two week tour to Italy because they worked their whole freaking life for somebody else to, to not feel good. So, even if, even if you have the money, right? Like, II, I have family members, right. That have paid off houses, no debt. They live on social security. They, they, they live on this, this plan. Right. And they have the ability to do things but they just can't because it's too late. They took the factor of time out. So, like, even if this works, why would you want to wait until you are 67 at the age of retirement? Like, Brian is a rare freaking exception of people in their sixties live in life. You know, I, I mean, at least in the United States in Oklahoma, I don't see a lot of 70 year olds who are like, yeah, that guy's doing whatever he wants.

I never say that. No, I don't think anything about Dave's plan is, is actually a great financial start for the majority of people. And that's why it's so popular. Uh, it, it's what people should be doing as soon as they get out of college. Uh, the problem is most people don't and they, they drive themselves into debt and they find Dave Ram, they find Dave Ramsey's podcast when they're 45 and they're like, man, this guy is telling me what I should have done 20 years ago. So he has value for a lot of people obviously super successful. But Dave. Dave didn't, didn't make his money following his plan. Dave's not rich because he followed his plan. Right? Dave's rich because he, you know, teaches millions of people and he sells millions of courses and millions of books, uh, and has successful radio shows and podcasts. That's why he's rich. He's not rich because he paid off his house. Uh You know, I, I just already save 15% of his day job income. No, he's not rich because of that. I, I guess that's the idea, right? Is like, you, you follow the plan, you get to step seven, you do whatever you want and hopefully it's interesting enough to generate millions and millions of people watching your content to where you can actually do whatever you want.

You know, I, if you've listened to his podcast, uh or his radio show, a lot of times people call in and they're either asking a couple of questions. How do I get myself out of debt or I'm already out of debt. And so what do you think, Dave? Can I buy the new sports car? And Dave will be like, well, is your house on a 15 year mortgage and is it, you know, only 25% of your take home pay? And uh, you know, are you fully funding your mutual funds? And do you have your 3 to 6 month savings account? Well, if you're checking all the boss, yeah. You know. Yeah, John, you can go buy that sports car in cash. The thing is John shouldn't be going and buying the sports car because John should be working on building his passive income up so he can quit that day job. Really eliminate the risk. Ok. But as long as Dave, as long as he's checked all of Dave's boxes and Dave says he can go buy the $150,000 car, he'll go buy it and he'll think I'm just achieving my, my life dream when really he doesn't have any real savings that are earning him a lot of money passively. And so he's, you know, I'll say it, I, I've said it before. If you don't, if you don't find a way to make money while you sleep, you will work until you die. Ok? I don't know who said that. I, I heard it somewhere but it's really good.

Like you, you have to learn how to have money, work for you and, and, and that way you eliminate the need for work in your life and then you can really do what you wanna do if you have a day job, uh, working for somebody else as an employee making 50 grand, 75 grand a year. Uh, you're never gonna do whatever you want. Even if your house is paid off. Dave says you can, but you can't, uh, because you gotta show up every day and you get so many vacation days a year. And so they really are dictating your freedom. So if you really want to do anything you want in this life, you have to separate your income from your time. And as soon as you do that, then you really do have the time uh to do whatever you want. I, I think it's a halfway decent advice, I think for your example, you know, if you're 4045 and have found yourself in a world of hurt and, and debt and this is a plan to get you in a negative balance sheet, right? Like that's a plan to get you to zero. Like that's a plan to get you to a zero net worth from negative whatever you want. I would follow the advice. But if you're trying to go from zero to a million plus a net worth, I would pivot off of Dave Ramsey.

I would, I would find a different radio show to listen to um, and, and get some more aggressive advice. Right. Even at 45 if you're at 45 and you have a net worth of zero and you have an income and you can pay your bills, you need to take some risks. You need to build the wealth up. You need to start a business, you need to get a side hustle, you've got to do that and 45 is not too late to do that. I, I firmly believe it. What he doesn't on here guys at all is uh increasing your income or getting passive income. And so really the hard part I think, you know, II I have this example where your income is a stream, it's like a waterfall and it's pouring into your life. And let's say it's 50 grand. You know, if you start to, to save for this bucket retirement and save for college fund and save for my mortgage payment, you're siphoning off all this water to where it becomes a little trickle and there's no, there's nowhere else to save, right? And so then you're just done, then you're cutting coupons trying to save 50 cents at the grocery store like there isn't enough there. So what you should do is go upstream and focus a lot of your energy, not on the last couple of percent of savings on your income, but building a bigger source, right?

Go upstream, create a larger income source where the water's coming over that waterfall so fast you can't contain it and you could never save it all and you don't even need to. Right. And that's the kind of lifestyle that we want to help people think about. It's not fo yes, focus on saving but only to a means to an end. But your real focus should be on, on creating a bigger income source. Uh That's where the big returns are gonna happen. All right, I hope that was helpful podcast. Uh No cold plunge next week. Send us your video for $100. Alright. Well, um yeah, I think that's it for dump on Dave. Love you. No hard feelings. We liked a lot of his points. I mean, I was expecting to not like more of them. We liked most of them. Alright guys. Thanks till next time.